The mailed document should follow the format of the checklist and conform to Rule 1.5 of the Commission’s Rules of Practice and Procedure. Documents tendered for filing must be typewritten, printed, or reproduced on paper 8 ½ inches wide and 11 inches long. Any larger attachments must be legibly reduced or folded to the same size. The type must be no smaller than 10 points. The impression must use 1 ½ -line or double spacing, except that footnotes and quotations in excess of a few lines may be single-spaced. Both sides of the paper may be used. A document of more than one page must be bound on the left side or upper left-hand corner. If a transmittal letter is submitted (see Rule 1.13(a)), it must not be bound to the tendered document. All copies must be clear and permanently legible.

A: Applications are accepted on a rolling schedule, starting December 1, 2014 (there is currently no end date). The hard copy should be postmarked by the date or earlier of the online application submission.

A: CASF funding is available to "telephone corporations" licensed by the CPUC, as defined by Section 234 of the California Public Utilities Code. "Telephone corporations" are entities with a Certificate of Public Convenience and Necessity (CPCN) or wireless carriers, identified in federal and state law as Commercial Mobile Radio Services (CMRS), who are registered with the CPUC and the FCC (e.g., they possess a Wireless Identification Registration).

With the passage of Senate Bill 740 as implemented in CPUC Decision 14-02-018 and Resolution T-17443, CASF funding also became available to non-telephone corporations that are facilities-based broadband service providers. The Commission adopted the National Telecommunications and Information Administration’s (NTIA) definition of a facilities-based broadband service provider, which is generally defined as any entity providing internet access service or middle mile transport over its own fixed or wireless facilities to residences, businesses, or other institutions. However, non-telephone corporations must provide last-mile broadband access to households that are unserved by an existing facilities-based provider and only receive funding to provide access to households that are unserved or underserved. Decision 14-02-018 and Resolution T-17433 outline the requirements for non-telephone corporations seeking CASF funding.

The Commission will consider applications from satellite service providers provided that the applicants are able to prove functionality, and are able to meet the speeds required.

Q: Must separate applications be submitted for different but contiguous CBG?

A: Although in some cases it may be better for an applicant to submit separate applications, they are not required to do so. Resolution T-17443 defines a “broadband project” (on page 5 of Appendix 2) as a “deployment encompassing a single contiguous group of Census Block Groups (CBGs).” Any and all calculations for unserved versus underserved / served areas within the proposed contiguous service area must be applied and clearly described.

A. Broadband, as defined by the National Telecommunications & Information Administration (NTIA), is a “two-way data transmission to and from the Internet with advertised speeds of at least 768 kilobits per second (kbps) downstream and at least 200 kbps upstream to end users.”

Q. Can a single application comprise both underserved and unserved areas, or must an application be for exclusively one or the other?

A. Yes, an application may be a “hybrid” application, meaning that a project may incorporate underserved and unserved areas. In the online application form, you should select all applicable boxes to designate the types of areas a project proposal will include.

A. Yes, hybrid broadband projects should clearly show the number of households and the project size (in square miles) for each area type: Unserved and underserved. In addition, the applicant should clearly state the CASF funding requested by each area type (unserved and underserved) by pro-rating costs when projects include facilities in unserved and underserved areas (including a detail explanation of the allocation of these costs). CASF funding percentages for unserved (up to 70% of the project’s total cost) and underserved areas (up to 60% of the project’s total costs) differs so it is important for the applicant to be able to explain the costs of the project by service area type.

Q: How does an applicant determine and document whether an area is unserved or underserved?

A: It is recommended that applicants use the California Broadband Availability map to determine whether an area is deemed as served, underserved or unserved since this is the primary tool used by CASF analysts to determine served status. Use of the map will show existing broadband providers in the project area. Please refer to the broadband map instruction sheet for CASF applicants (to be created and linked here) that describes use of the map for this purpose.

Broadband served status as indicated on the map can be challenged, since the information on the map is for advertised speeds and may not reflect what service is actually available. Please refer to the following FAQ regarding the challenge process.

To document a project’s served status, applicants will reference CBGs (census block groups), census data, and ZIP codes (for areas that intersect), as well as served status for the entire location. If more recent information is available from county/city sites reflecting new housing developments or new community demands such as hospitals, schools, libraries, among others, the applicant may use these data sources/ information to help justify their proposed project. Please provide this information in the project summary. If the served status of the area is to be challenged, please also state this. Details regarding any challenge to the served status of the area should be included in the 'Assertion that the area being proposed is Unserved or Underserved' (question 14 of the CASF Application Checklist).

Q: How will challenges to unserved vs. underserved/served areas be reviewed?

A: 1. An entity submitting an application for CASF grants/loans may challenge that an area indicated to be 'served' (as shown on the California Broadband Availability map) is in fact unserved or underserved.

a. If the party has access to GIS software and/or data, the party can submit shapefiles or, if not, the party can submit an Excel sheet. Information that is required includes:

i. Census Blocks and the providers (if any) that claim to serve these census blocks.

ii. Speed tiers being offered by the providers for that/those particular census block/s.

iiii. If the challenge is specific to mobile broadband availability in the area run the CPUC mobile testing application (available on Android phones only, named 'Calspeed' in the Google Play Store) and upload those results showing no service in that/those particular census block/s.

b. Other useful information includes:

i. Proof of denial of service from providers in the area.

ii. Emails or letters of the denial of service.

iii. Print screen of an online confirmation from a provider’s website that no service is being offered in that area (some providers allow consumers to be able to enter their location and show if service is available).

c. Always include any additional items that may support your challenge or that the area is not served.

Details regarding any challenge to the served status of the area should be included in the 'Assertion that the area being proposed is Unserved or Underserved' (question 14 of the CASF Application Checklist).

Note that if the challenged CBG is determined to be “served” the applicant has the option to modify its application by omitting from the total project cost and budget consideration the parts of the CBG that are served, or by limiting the project area to only those parts of the CBG that are unserved or underserved.

b. Speed Tests with a description on how the speed tests were conducted and what tools where used. Address of the location of where the speed test was performed should be included.

c. Always include any additional items that may support your challenge

3. An individual, organization or service provider may challenge on middle- mile projects asserting that there is already adequate infrastructure and should provide the following:

a. Description of why the challenger asserts that there is enough backbone/backhaul infrastructure in the area that the need for a new middle mile project is unnecessary.

b. If there is existing middle mile infrastructure in the area, include details of the infrastructure in place such as:

i. Provider

ii. Technology type

iii. Location (list of census blocks)

iv. Shape files of the existing middle mile infrastructure

v. Number of subscribers to the middle mile infrastructure

vi. Speed tiers being offered

vii. Speed Tests with a description on how the speed tests were conducted and what tools where used. Address of the location of where the speed test was performed should be included.

viii. Current facilities, availability, and capacity (i.e. Does the existing infrastructure have enough available capacity to support new inter-connections/transport/backhaul to last mile providers who connect end users, new connections to anchor institutions, etc.?). If it is a fiber network, how many total of fiber strand-miles are being use, how many leased, how many dark fiber that can become available to last-mile users, etc.

ix. Always include any additional items that may support your challenge

Any individual challenging the an unserved or underserved determination or challenging middle-mile projects must submit the following information in an email to CASF_Application_Questions@cpuc.ca.gov with the subject line heading of: "Challenge Related to a Potential CASF Application.”

Challenger information –

Name

Contact information (including e-mail)

Type of entity (Consumer, Company, Non-profit, etc.)

Type of challenge (challenge to served status, to un/underserved status, to middle-mile projects)

While staff reviews the challenge, we may require and request additional information.

While staff reviews the challenge, we may require and request additional information.

Q: What is the 'right of first refusal' and how does that impact area eligibility for CASF funding?

A: Existing providers have an opportunity to demonstrate that they will, within a reasonable amount of time, upgrade service in their existing underserved territories. Whether an area is underserved is determined by theCalifornia Broadband Availability map. We have referred to this as a “right of first refusal.” An existing provider which chooses to upgrade broadband networks in its existing underserved territories using its own funds have until November 1, 2014 to make a commitment to upgrade by sending a letter to the Director of the Communications Division and email a copy to the CASF distribution list. An existing provider will have until May 1, 2015 to complete the project by upgrading its network to provide served speeds. During this time, the CPUC will not award a CASF grant to fund a broadband project in that same project area.

At project completion or May 1, 2015, whichever is sooner, the Commission will require the provider to submit documents showing the project area, broadband availability and the speed tiers available with speed tests showing that the project indeed provides served speeds.

The project completion deadline can be extended if the existing provider submits documents on or before may 1, showing that it is a recipient of a Connect America Fund (CAF) grant with information regarding project area and project timeline. The existing provider may file for extension of up to 6 months for permitting issues, CEQA issues, and acts of God (including weather), with documentation.

Q: What are the requirements/restrictions for sources of matching funds?

A: Projects in underserved areas are eligible for grants equaling up to 60% of the total project cost and for a loan equaling up to 20% of the total project cost (with a $500,000 maximum). Projects in unserved areas are eligible for grants equaling up to 70% of the total project cost and for a loan equaling up to 20% of the total project cost (with a $500,000 maximum). Applicants are responsible for securing all funding not provided by the CASF grant.

An applicant is required to post a performance bond if it cannot certify that the percentage of the total project costs it is providing comes from its capital budget and will not be obtained from outside financing. In that case, the grantee must send an executed bond, equal to the total amount payable under the CASF award, to the Executive Director of the CPUC and to the Director of the Communications Division within five business days after the completion of its CEQA review. The performance bond must be callable for failure to complete the CASF funded broadband project. Applicants who will complete the project and front-end all the project costs before requesting reimbursement may request exemption from the performance bond requirement.

Q: What are the requirements / restrictions for capital and operating expenses and what should be included in the Total Project Cost?

A: Capital costs should only reflect costs attributable to the construction of the broadband infrastructure project the applicant proposes to build. CASF grants will not fund operating or maintenance expenses.

A: The PEA (Proponent’s Environmental Assessment) should include all information and studies required under the Commission's Information and Criteria List adopted pursuant to Chapter 1200 of the Statutes of 1977 (Government Code Sections 65940 through 65942). This information can be found on the Commission's website in the Electric Siting and Environmental Permitting section, published at: http://www.cpuc.ca.gov/PUC/energy/Environment/infocrit.htm

Q: What is the implication of AB 2272 (prevailing wage for public works) that was signed into law with respect to how it will affect CASF grant applicants?

A: AB 2272 revises the definition of "public works" to also include infrastructure project grants funded in whole or in part by the CASF which are subject to California’s prevailing wage requirements. The amended language makes some of the projects funded by CASF subject to the prevailing wage requirements. While the CPUC has not issued a formal policy statement regarding implementing these new requirements, it is expected that CASF applicants will comply with the State’s the prevailing wage requirements. Applicants may incorporate required labor costs associated with capital expenditures into their grant and loan proposals, but will need to be able to match any associated increases in the matching fund component of their project proposals. For further information regarding whether a specific grant proposal is subject to the State’s prevailing wage requirements, contact the Communications or Legal Division.

Q: What are the requirements / restrictions for capital and operating expenses and what should be included in the Total Project Cost?

A: Capital costs should only reflect costs attributable to the construction of the broadband infrastructure project the applicant proposes to build. CASF grants will not fund operating or maintenance expenses. Labor may be included in capital costs as described in preceding FAQ(s).

A: CASF Grants budgets may include labor costs associated with capital and related construction expenses, but not with those associated with operating expenses. This would generally include the cost associated with subcontractors and contract labor hired by grant applicants for capital expenditures.

Q: Is the cost for CEQA compliance considered part of the overall project cost, or must it be excluded from the total project cost?

A: The cost for CEQA and related environmental permitting needs to be included in proposed project budgets, estimated based on the probable type of CEQA review that will be conducted. For applicants unfamiliar with CEQA, we recommend consulting with an expert in this estimation process. If you believe the project will be categorically exempt, please include your rationale for the assumption. At this time, the CASF program does not provide expert consultation to project developers for environmental permitting budget estimation but staff may post guidance resources if they become available. Applicants are responsible for providing their best estimates for environmental permitting when they submit initial applications, with the understanding that these budgets may be refined in coordination with the CPUC’s CEQA team during the CASF application review process.

Q: Regarding the Broadband Infrastructure Revolving Loan Account (R.10-12-008), are these loans corporate-only or is a personal guarantee required?

A: As part of the underwriting review of CASF loan applications, the credit worthiness of applicants will be assessed. This includes the evaluation of the personal credit of the applicant’s principals as appropriate. A personal guarantee may be required from the owners and/or principals of privately held corporations who have 20% or more ownership to properly underwrite the loan request. Personal guarantees may also be required for anyone under the 20% threshold that is deemed to be key to the business operations and/or future success of the company. A guarantor would be requested to provide a personal financial statement and tax returns for evaluation. A personal guarantee would not be required if a company is a sole proprietorship since in this case the individual borrower as a sole proprietor would be directly personally obligated.

Q: Please clarify the requirements that CASF grant applicants provide three years of audited/attested financials? Noting that CPA audits or attestations would be a major expense for small companies, would the CPUC accept a less costly alternative, and if so, what?

A: Applicants must submit an audited or attested financials, defined as follows. In an audit, an accountant expresses an opinion as to whether or not a set of financial statements is presented fairly with respect to the generally accepted accounting principles. In an attestation, an accountant expresses an opinion on the reasonableness of a particular assertion or set of assertions. Examples of assertions covered by attestation engagements include financial forecasts and compliance with laws or procedures. Note also that audits and attestations are performed based on different sets of standards (though they are functionally identical in most ways).

Q: CPA audits/attestations apparently take a considerable amount of time to produce. If they are not completed by December 1st, can we submit an application anyway with that section supplied when available?

A: An applicant may indicate that their audit or attestation is in progress and submit the remainder of their application after the initial submission, but applications will not be fully reviewed until all the financials and other elements are received.

CHALLENGED CASF APPLICATIONS:

A: The updated California Broadband Map reflects data collected from broadband providers. Cal State University, Chico collected availability data from broadband providers in the region, aggregated them, and produced a GIS map layer, which is/was provided to the Commission and used to update the Map.

Q: What happens when the proposed Census Block Group(s) (CBGs) in my application is challenged by other service providers or is shown as served in the California Broadband Availability Map?

A: Communications Division (CD) staff will determine a CBG’s service level based based on the definitions of unserved and underserved areas provided in Decision 12-02-015 and the data used to create the California Broadband Availability Map. However, CD staff acknowledges that the maps may not be 100% accurate.

Therefore, as part of the review process, CD staff overlays shapefiles submitted by applicants onto the California Broadband Availability Map and challenged areas maps. This is to verify which areas in the CBG are challenged or which areas appear as served. If the CBGs appear already served, staff will consult with the applicant. To the extent an applicant disagrees, applicants will need to submit additional data to prove that the areas applied for are either unserved or underserved.

CD staff uses this same method of overlaying shapefiles submitted by applicants onto the California Broadband Availability Map and maps submitted by challengers and verification process to determine which areas in a CBG are served, unserved or underserved with all the other CASF applicants. Challengers are responsible for providing verifiable evidence to CD staff that proves the challenger already serves the proposed project area at required speeds. If CD staff cannot verify a challenger’s claim, the challenge will be denied.

Q: Are challengers claiming to serve a given area required to provide verification of broadband service?

A: Entities challenging applications must submit maps of their service area(s) and addresses of households in their service area(s) to enable staff to verify the challengers’ allegation that the area(s) are already served and not underserved or unserved.

A challenger must provide documentation that the area or CBG is in fact already served at the speeds it claims to provide customers (e.g., maps or a copy of a customer bill or other verifiable evidence). The challenger also must submit its coverage and service data to the CPUC’s Broadband Mapping team so that the information is included in the California Broadband Availability Map. CD staff will investigate this information provided. CD will inform the applicants of any challenges filed provide the challenger’s name and all non-confidential information submitted. Once CD makes a final determination, it will notify the applicant and challenger of its determination.

If the challenged CBG is determined to be “served” CD staff will reject the application or ask the applicant to modify it application. The applicant has the option to submit a modified application in subsequent rounds, either for the same area (provided that the areas of the CBG that are not “unserved” are omitted from project cost and budget considerations) or for only those parts of the CBG that are unserved.

Q: If challengers are not able to provide verification of the CBGs in question, are their challenges ignored?

A: No, if a challenger who is asked to provide additional information is not able to do so for various reasons, CD staff will use whatever information it has in its review to determine whether a proposed CBG qualifies as unserved or underserved.

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